Fix & Flip Financing – Case Study in St. John’s

Borrower was eyeing a dated property in St. John’s, Newfoundland with hopes of turning it into a profitable investment. They reached out to their Mortgage Broker who suggested they explore Keystone Capital’s Fix & Flip loan option, which is designed to provide a seamless process for the borrower, and quick access to renovation draw funds, minimizing your renovation time frame and maximizing potential profit.

The numbers:

Purchase Price = $250,000

Renovation Budget = $125,000

In this situation, Keystone is able to provide up to 70% of the purchase price of the property, plus the entire renovation budget, released in progress draws once work has been completed.

Loan Breakdown:

Financing for purchase = $250,000 * 70% = $175,000

Financing for renovation = $125,000

Total Loan Facility = $300,000

Our flexible loan terms allow for six or 12 months open options, but this particular borrower expected to complete the project in five months.

Lets look at how the project turned out:

Sale price = $450,000

Less Purchase Price = $250,000

Less Renovation Costs = $125,000

Less Mortgage Costs = $23,000 (estimated)

Total Profit = $52,000!

With a profit of over $50K in just five months, this was an excellent opportunity for the borrower to jump on. Reach out to Keystone to discuss your next fix & flip opportunity.

BROKERS: Keystone has a “plug & play” fix & flip calculator that we are happy to share with you and your borrowers. Reach out to Ryan for a copy.